Tech Influence Spending Unaffected By Recession

Although technology companies have laid off employees, cut salaries and repeatedly warned investors of sluggish demand, the tech industry as a whole has not cut its influence spending at all.

During the first six months of 2009, high-tech companies spent nearly $60 million on lobbying lawmakers and federal agencies and is on track to match last year’s record of $122.5 million, according to the latest data from the Center for Responsive Politics (CRP).

If anything, spending this year may increase to new highs because of renewed efforts by Congress, the Federal Trade Commission, and White House to enact new legislation regarding cybersecurity, privacy, online advertising and immigration.

“The spending goes up whenever there is a risk of legislation,” said Chris Hoofnagle, director of the Berkeley Center for Law & Technology at the University of California at Berkeley.

What are the tech companies lobbying for? Just about everything.

On a bill-by-bill level, according to data compiled by the CRP, most of the lobbying attention in the first half of this year was aimed at a single bill that has the potential to deliver millions to vendor bottom lines. The Health Information Technology for Economic and Clinical Health (HITECH) Act sets aside more than $20 billion as part of the massive federal stimulus to upgrade health care IT and create a national electronic health records system.

The HITECH legislation was passed in February.

The Patent Reform Act of 2009, which is pending, is another piece of legislation that has received a lot of interest from high-tech lobbyists.

Among the many issues Microsoft has filed lobbying reports on is The Video Game Health Labeling Act of 2009, that would require certain video games to include ratings and warnings on the risks of exposure to violent video games.

One of the bills that Google Inc. reported lobbying on is the Global Online Freedom Act of 2009, which would, among other things, “deter U.S. businesses from cooperating with Internet-restricting countries in effecting online censorship.” That bill is now pending in committee.

Oracle lobbyists weighed in on the H-1B and L-1 Visa Reform Act that would set restrictions on visa use. That bill also remains in committee.

Among the bills that has received lobbying attention from Intel, is the Employee Free Choice Act, which would make it easier for workers to unionize. That legislation is also pending.

Over the next year, Hoffnagle expects that Congress will take up bills on security breach notification and behavioral targeting — the display of advertising based on browsing history. Both of those are the legislative agenda for next year. The Federal Trade Commission is now in “fact gathering mode” on these issues and a policy statement, which could be the underpinning for legislation, is expected in October.

It’s possible that the FTC could seek a broader standard of what constitutes harm in online advertising, shifting from the “harm standard,” where financial losses have been suffered, to a “dignity standard” that would provide broader protections, said Hoofnagle.

Alan Paller, research director at the SANS Institute, a Bethesda, Md.-based information security education firm, said another reason for the strong spending on lobbyists is the heavy spending by federal agencies during the last several months. The federal government has been one of the few heavy spenders during the recession. prompting most lobbyists to “do double duty as sales folks — using their contacts to improve the chances that their companies will get additional deals,” he said.

Paller also sees this a huge year for new legislation on cybersecurity, at least a dozen bills so far. that will attract spending on lobbyists.

“The tech lobbyists have to keep track of all of that and try to keep the government form doing anything that might force them to deliver more secure products,” said Paller.

The technology industry is now the fifth largest spender on lobbying. The largest is the pharmaceutical and health products industry, which has spent some $134.5 million so far this year.